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The African Development Bank (AfDB) has announced the approval of a $450 million Trade Finance Package for the African Export-Import Bank (Afreximbank). The facility, which was authorised by the Board of Directors of the AfDB on Wednesday, will boost intra-Africa trade, foster regional integration and facilitate a reduction of the trade finance gap in the continent.

The credit facility consists of a three-year $150 million unfunded Risk Participation Agreement (guarantees) and a four-year $300 million Trade Finance Line of Credit. The combined loan will enable the expansion of Afreximbank’s risk bearing capacity for the confirmation of letters of credit, and support increased trade through the provision of cash funds to local and corporate African financial institutions. It will also provide financing to over 100 financial institutions, contribute to macroeconomic resilience in about 28 countries, and inject at least $2.8 billion into trade in Africa.

The objectives of the Afreximbank projects align with the ‘High-Fives’ priority goals of the AfDB. The Afreximbank said it is committed to the advancement of export diversity, strengthening of trade value chains and the promotion of value addition to African economies.

Established in 1993, Afreximbank said it approved about $10.3 billion in 2016 and has a total asset of $9.4 billion as at April 30, 2016.